In business, one seeks to establish a sustainable long-term competitive advantage — something that allows you to outperform or outlast others.

Cities provide multiple competitive benefits: their compactness directly affects time, energy, and resource efficiency. In addition, cities generate new ideas and cultural experiences by bringing together a critical mass of diverse people.

While technology has certainly made it possible for people to work from just about anywhere, this is really only useful for executing work which has already been broadly defined; when it comes to generating new ideas nothing beats face-to-face interaction. It is simply a higher-bandwidth form of communication, and ideation requires trust and some level of long-term interaction.

Car culture is inefficient and runs counter to a lifestyle designed primarily around face-to-face interaction and ideation. Idea-based industries (advertising, banking, technology) have long flourished in urban environments — the kind in which walking, bicycling, and public transportation are the most effective modes of transport.

The very idea of parking is a ridiculous and outdated concept. The notion that we should devote land, tie-up business resources in this feudal enterprise, and perhaps most ridiculously spend time looking for parking spots should convince anyone that this arrangement is not sustainable.

The strategic competitive advantages of cities are clear and incontrovertible. But if cities are so great, why are ours in such terrible shape?

Take Cleveland, for Example…

Most arguments against the benefits of cities tend towards the “Yeah, but” flavor — citing examples of how specific cities have failed. Such arguments are more informed by historical economics than by rational analysis of the present or future.

The argument in support of cities is deductive: inefficiency costs money, cities are more efficient, therefore cities have an advantage. The arguments used against cities are inductive: our cities have not worked well, therefore no cities can ever work well. One possibly valid reason to doubt the deductive argument is the very fact that so many people believe the inductive argument to be valid: the deductive argument can be invalidated only if the presumed efficiency never exists, which could happen if a critical mass of people does not accrue to realize it. Thus, the only thing in the way of a more efficient American future is our own doubt that it is achievable.

Here’s how Americans have been duped about the nature of cities, and how we can overcome our 20th Century biases to realize the sustainable competitive advantage that awaits us in our cities.

Industry

Industrial America was not a particularly pleasant place. Cities were crowded with workers, factories, coal smoke, animal waste, polluted waterways, and with the possible exception of New York’s Central Park were not designed environments in any way. It is quite understandable that people of means would have wanted to separate themselves from “common workers” and remove themselves to land surrounding the city. After all, land was the ostensible indicator of wealth for generations. Speaking generally, city centers were thus for people of lesser wealth.

Immigration

America’s great industrial centers required a vast supply of workers, and they came from across the globe. Each new wave depressed wages, which made them seem less desirable than the last, and clashing value systems created a constant xenophobic revulsion that made for de-facto segregated neighborhoods. Not wanting to risk these vagaries or witness these shifts, many opted for less dense, more stable environments.

Unions

Large numbers of low-wage workers densely packed in urban centers could be readily organized for collective bargaining. Henry Ford, in particular, hated this idea, not because he opposed the interests of those being organized, but because he hated the idea of someone profiting from those organizing activities. Ford was deeply anti-Semitic and he ascribed everything from banking to labor organizing as an evil influence of the Jew on the pastoral idea of the progress of industry.

As much as anyone else, Henry Ford invented the suburb and he did it to prevent workers from becoming organized. The Model T, and the suburban hierarchy it enabled, were not only the products of his business — they were a design element in the industrial, suburban future that Ford helped to create.

Industrial Consolidation

It is common to throw around words like “industrial decline” and to talk about the “rust-belt”, but the fact is that the post-war period was marked more by prosperity and consolidation than any kind of “decline.”

The capitalist system was just doing what it is supposed to do: create value for shareholders by eliminating inefficiency, and in many cases firms followed Ford’s example by relocating to suburban locations where land was cheaper and unions could be more readily controlled.

Reflexivity

Reflexivity is the idea that market participants can affect a market just by observing it. For example, a currency trader with an established track record can move a currency merely by stating an intention to take a position. In the same way, cyclical disinvestment in cities was launched by corporations who began to systematically disinvest in cities as part of their consolidations.

Systematic disinvestment in downtown areas by corporations led to a cycle of negative effects, almost all of which are what people mean when they talk about our “urban ills.” But as intractable as these problems seem, they do not negate the deductive argument in favor of urban environment. Instead, the argument is more along the lines of Yogi Berra’s, “No one goes there anymore — it’s too crowded,” which is both fallacious and clearly informed primarily by human perception.

Feudal Equilibrium

Reflexive disinvestment has affected politics in particular. Populations in many American cities are off 40% or more from their historical peaks (around 1950). Voter engagement in municipal elections has been abysmal; city officials are often elected on turnout under 25% and by margins of just a few thousand votes.

As a result, city politics often pulls in people more interested in using these positions for their own personal gain than for the greater good. However, there is a catch: if the abuses are too egregious, even more people will leave the cities and the parasite will kill its host. And so we end up with a kind of Peter principle of public service: each post is filled by someone competent enough to survive minimal public scrutiny and still get away with whatever shenanigans is motivating them. (Obviously this cannot be a fair characterization of every individual, but it is descriptive of the system as a whole.)

The political power establishment thus wishes to prolong this state of affairs; attracting large numbers of new, middle class voters will assuredly end their reign. So they do not advocate this; instead of implementing designs that would attract real investment, they talk about “getting tough on crime” and “fixing our schools,” and sometimes they genuinely believe they can address these problems. However, these issues are just final effects of reflexive disinvestment; fix that and crime and schools will fix themselves.

American Exceptionalism

Americans are too often blind to lessons from other parts of the world. Europeans are too effete and socialistic; Asians are too “foreign”. And everybody else, with few exceptions, is the enemy. We are not terribly good at stealing ideas from elsewhere, and we tend to over-value our own experiences.

Detroit’s current failures do not mean that cities are inherently ungovernable or inefficient. Tokyo, Berlin, Paris, London, Shanghai, Seoul and countless others serve as examples of livable modern cities that are being productively adapted with 21st century designs. Within the US, a few cities like Portland offer hints at what can be.

If one is going to try to argue against a deductive argument using an inductive one, it could at least be complete and balanced.

“But I Like the Suburbs…”

Thankfully, everyone is different. And often I hear people say, “But I like living in the suburbs.” Or they point out that I (or others) did or do. [Full disclosure: I have lived in the suburbs, worked in the suburbs and the city, went to college in the city when I was younger, and just bought a house in the city because I think now is a good time to make that investment; I am also tired of spending time driving.]

But here again it is inappropriate to try to use single individual examples to invalidate the general deductive argument. I am also not making a judgment about the relative value of the city or the suburbs. Too often people feel that their lifestyle is being threatened, and that is not the point of this argument. The only relevant issues are economic: if someone wishes to live in the suburbs, they should expect to pay for it with time, fuel cost, relative isolation, and a potential long-term political marginalization.

Right now, we are subsidizing the suburbs with fuel costs which do not account for environmental externalities. There is no reason to expect this to continue; however even if it does, energy will never be free. Suburbs are a bad economic bet for this reason alone.

Race and Partisan Politics

These two issues are so complex and divisive, I will refrain from discussing them here, despite the fact that I have considered them both in great detail. Each deserves a post (or a volume of books) in its own right.

However it should be said: race is not important to the deductive argument, and neither is partisan politics. Positive, reflexive investment in cities will make them efficient, productive, and diverse; this is a centrist idea that should make both the left and the right happy. Politics and race are both issues that have all-too often been hijacked by people looking to promote their own interests, and Americans have been historically unable to perceive any issue free of these lenses.

Placing Bets on the Future

The long-term strategic advantage that cities can provide (specifically through time, energy, and resource efficiency) is not made any less real by our past failures; America’s cities are indisputably its best hope for the future. The natural evolution of the American economy tends towards higher-order activity, and will ultimately settle on creativity and design at its apex. The longer we wait to begin a cycle of positive, reflexive investment in our cities, the longer we stall our country’s competitiveness and our ability to innovate.

We must only convince ourselves that a more efficient and livable future is possible; the rest will follow.

How did we get here? Why is it that America has an innovation deficit? It’s simple: we have lulled ourselves into complacency. America is bored because we have made ourselves boring.

Unleashing Self-Actualization

What do we mean when we talk about innovation and creativity? Really what we’re talking about is what psychologists call self-actualization. Put simply, it’s nothing more than realizing all of your unique capacities and putting them to good use. Self-actualization occurs best when it’s in the company of others who are doing the same. Companies that achieve remarkable results are typically loaded with people who are either self-actualizing or on a pathway towards it.

Abraham Maslow described this pathway as the “hierarchy of needs” to highlight the fact that people cannot become fully self-actualized if they are concerned with other more basic needs like food and security.

Like the USDA food pyramid, Maslow’s hierarchy identifies some important elements, but the idea that there is a strictly linear progression towards self-actualization, or that it is inclined to occur naturally, is probably wrong. Looking at the world around us, it’s easy to see examples of people whose lives who have petered out somewhere in the middle of his pyramid, even though their baser needs have been met.

I believe this is because we have designed 21st century America in such a way that we short-circuit the process of self-actualization in a number of important ways.

Problem 1: Suburbs

Self-actualization occurs best when people are able to connect face-to-face to discuss real-world ideas, try things out, and play. This means intellectual conversation with a diverse range of people, including a broad range of views. It means exposure to the arts, to music, and a shared desire to solve meaningful problems.

Suburbs short-circuit these important pathways for self-actualization in these important ways:

Slowing movement: people are dispersed – gathering requires use of cars

Lack of diversity: suburbs tend towards less diversity of views, not more

The first two points are obvious enough, but let’s spend a moment on the last one.

Suburbs divert self-actualization into pursuits like neighborhood-hopping and home improvement. It’s not surprising that we just suffered the effects of a housing bubble. With millions of peoples’ self-actualizing efforts poured into drywall and granite countertops, there was simply a limit to how much housing and home-flipping we can endure. It doesn’t do anything. Working on housing is first-order toiling, not long-term advancement.

Is it surprising that the icons of the housing bubble years were “Home Improvement,” “Home Depot,” and the SUV? The SUV was literally a vehicle for improperly diverted self-actualization: if I have a vehicle that lets me improve my basement and my backyard, I can become the person I want to be.

Problem 2: Artificial Scarcity of Opportunity

Suburbs have had other unfortunate side-effects: we have allowed corporations to define the concept of work. By dispersing into our insulated suburban bubbles, we have largely shut down the innovative engines of entrepreneurship that used to define America. Where we might fifty years ago have been a nation of small businesses and independent enterprises, we are more and more becoming reliant on corporations to tell us what a “job” is and what it is not.

To the extent that we are not spending time together coming up with new important ideas, we are shutting down opportunities for ourselves. And corporations are happy to reinforce and capitalize on this trend. Opportunity is unlimited for people who are legitimately on a pathway towards self-actualization. We choose not to see it because we think of “jobs” as something that can only be provided by “companies,” and not created from scratch by collaboration.

Problem 3: Reality Television

Reality television is an ersatz reality to replace our own. It steps in where we’ve failed at self-actualization. It is both a symptom and a cause of our failure. As a symptom, it shows that we have so much time on our hands that we can spend it worrying about somebody else’s ridiculous “reality.” As a cause, this obsession can only be serviced at the expense of our own shared reality.

Problem 4: Car Culture

As a society, we spend way too much time in cars. Some of this is due to the issues I already raised about suburban design. But besides that, we spend a ridiculous amount of time stuck in traffic, waiting at red lights, and trekking around our metropolises.

Cars are fundamentally isolating. Time spent in a car is time you can’t spend doing something else. Sure, they can be useful, and I’m not anti-car, I’m just anti-stupid. If we as a society are burning many millions of hours each week in our cars stuck in traffic and covering unnecessary miles, it’s hard to see how that’s helping us become self-actualized (unless it’s in the backseat) and become more innovative. It’s a tax on our time.

Some have also suggested that one reason we have so many prohibitions on what we can do while driving is because we really just don’t like driving that much. Maybe the problem with “texting while driving” is that we are driving, not that we are texting. Maybe communication is more important societally than piloting an autonomous 3,000 pound chunk of metal and plastic?

A Solution: Well-Designed Cities

We’ve had the solution under our noses all along, but we’ve chosen to let our cities languish. Historical facts about America have led our cities to evolve in particular ways that differentiate them from some of our peers in Europe in Asia. But there is hope, and we must recognize the assets at hand in our cities.

Cities offer higher density populations which lead in turn to innovation and a flourishing of the arts. They lead to efficiency of movement and face-to-face communication, which is absolutely essential for intellectual self-actualization and entrepreneurship. Well designed public places let people interact and share, and also provide a platform for festivals, celebrations, and entrepreneurship. There are simply too many positive assets to ignore.

Arguments that American cities are unlivable today are tautological and self-reinforcing. The very problems that are most often cited (crime and education) are the same problems that would most benefit from entrepreneurship and real long-term economic development activity.

The root cause for the abandonment of our cities is race. In the case of Baltimore, WASPs left when Jews became concentrated in particular areas. Jews left when blacks became concentrated in particular areas. And “blockbusters” capitalized on the fear by benefiting on both ends of these transactions. In 50 years, Baltimore (and many American cities) changed dramatically.

Young adults today simply do not remember the waves of fear that sparked this initial migration. It may be a stretch to say that we are entering into a “color blind age,” but we do live in an era where we elected the first black president. I believe we are at the very least entering an age where people are willing to consider the American city with fresh eyes.

We are at a turning point, on the cusp of a moment when people will start looking at our cities entrepreneurially, for the assets they possess rather than the history that has defeated them. We are at a point where we can forget the divisive memories of the mid-twentieth century and forge a future in our cities that is based on shared values of self-reliance, innovation, and entrepreneurship.

Designing Our Future

The design constraints we have proposed for the last 50 years — abandoning our cities, relying on cars, building suburbs and big box stores — have led to the America we see today. And I ask simply, “Do you like what you see?”

We’ve let the culture wars frame these difficult design problems for too long, and it’s time now to put them behind us and start to ask questions in fresh terms. It’s clear now the answer likely doesn’t involve old-school silver-bullets like “Public Transportation,” because simply overlaying transport onto a broken suburban design doesn’t fix anything. Building workable cities and investing in long term transportation initiatives that help reinforce a strong urban design is much more sensible.

And make no mistake: self-actualization is an intellectual pursuit, and the kinds of cities that promote real self-actualization, innovation, and entrepreneurship must become hotbeds of intellectual dialog. Truth and acceptance of facts is an underlying requirement for self-actualization, and we can no longer delude ourselves into thinking that a society built on suburban corporate car-culture makes economic sense.

To continue to do so is to prolong and widen America’s innovation deficit.

Nearly every weekday between 4:00 and 7:00pm, eastbound US Route 50 in Annapolis, Maryland comes to a standstill. It typically happens near the westernmost edge of the city, and for a distance of roughly 7 miles, traffic inches along at a speeds often less than 10 miles per hour.

Yesterday it took me 30 minutes to cover these 7 miles (5:30 to 6:00pm).

It would be one thing if it was just me that was inconvenienced, or if this was a result of an accident or some unusual circumstance, but not so: this happens every day and there are tens of thousands of people affected by it. There is nothing unusual about it. We can only infer that this is how the road was designed to operate.

It would also be one thing if it was just this stretch of Route 50 that was affected by this kind of thing, but we all know it’s not. The Washington Beltway, to take one well known local example, is also apparently designed to fail spectacularly every morning and afternoon (and sometimes in between).

What does it say about a society that has its citizens sit in bumper-to-bumper traffic, day in and day out, spewing CO2 and other pollutants and wasting their time?

To me, it’s a sign of contempt. Anyone that would knowingly have people spend their time (and fuel) this way, day after day, must be filled with utter disdain for those so effected. Who’s to blame for these designs?

Surely there are some highway planners and road builders that could take the blame, but I have to think that any changes to the roads themselves can only yield marginal improvements — however needed those improvements may be.

The real issue boils down to us — the citizenry — and where we invest our financial and political capital. We are to blame.

We are the ones who have repeatedly failed to fund public transportation initiatives acquisto viagra. We are the ones who have lacked the foresight to discourage long distance car commutes. Annapolis residents famously rejected the extension of the Washington DC metro along the US 50 median because it would “bring crime” from the big city. Now Annapolis is its own capital of crime, and DC is further away than ever by car. And the median strip that once could have accommodated the metro has been sacrificed to ineffective additional lanes. Opportunity lost.

So, there you have it: we’ve locked ourselves into an economic model that provides long term competitive disadvantage. While other countries make good use of public transport and respect people’s time by moving them around efficiently, lowering pollution and making people more productive in the process, we’re stuck in the 1970’s, with people killing 2-4 hours per day in their cars spewing gases. Nice.

Severn River Bridge Backup, US 50

Miles

7

Lanes

5

Hours in Backup

0.5

Average Car Length (ft)

20

Number of Cars/Lane

1848

Number of Cars

9240

Number of Cars/Hour

18480

Number of Hours/Day

3

Number of Cars/Day

55440

Idle Fuel Consumption/Hr

0.5

Gallons Fuel/Car

0.25

Fuel Cost

1.6

Fuel Cost/Car

0.4

Total Cost/Day

$22,176.00

CO2 Generation/Gallon (lb)

22

Total Gallons Gas

13860

Total CO2 Output

304,920.00

Tons CO2 Output

152.46

Man Hours

27720

Average Hourly Rate

$15.00

Lost Value

$207,900.00

So every day, by design, this SINGLE stretch of Route 50 causes at least $207,900.00 in lost productivity for people, costs $22,176.00 in fuel (at $1.60/gallon — try it at $3.99), and generates 152.46 TONS of CO2 output. And that’s when it’s working AS DESIGNED! This is what it’s SUPPOSED to do??!?

Go ahead and add in every other backup in Maryland — the DC Beltway, the Baltimore Beltway, I-95, I-83 for starters — and you’ll have an amazing amount of lost time, energy, and productivity! It’s staggering what a drag this is on our economy. And the first instinct we citizenry has is to expand the current roads and build new ones. And this won’t help!

The only things that will really help are to 1) work closer to where you live, 2) use public transportation or bikes to get there, 3) improve the design of the roads we have.

The inability (er, unwillingness) to make this happen in suburban America is why places that have better public transportation (and the vibrant work/residential communities that invariably build up around it) will outpace us in the long term.

We simply can’t compete in the world economy if we’re locked up in our cars.

With the price of gas where it is, along with my own desire to get more exercise, I’ve adopted a set of rules regarding bicycle usage, and encourage everyone to do the same. I think it represents a distinctly different attitude towards bicycling than we’re used to. See what you think.

Ride a bike for a reason, not just for recreation; while riding a bike for recreation is fine, the idea is to promote replacement of cars with bikes where possible. Make a point of choosing trips where you actually are replacing a car trip.

Don’t wear funny sports clothes. They preclude your ability to partake in normal society. If you’re going to a lunch meeting, no one wants to see bikerman in spandex. Furthermore, wearing sports clothing promotes the image that bikes are for ‘cyclists’ and not normal people. Do wear a helmet, and lock it to your bike when you need to go in someplace.

Go where you need to go, including busier roads, if that’s what’s necessary to reach your destination. Bikes will never be used as replacements for cars unless they can truly substitute. By making yourself visible on major roads, you increase the visibility of bikes as a whole and help raise awareness of problem spots. Obviously use common sense and avoid limited access roads and unsafe situations. But DO go where you need to go to complete your trip.

Obey traffic laws and signals. Being on a bike doesn’t give you a free pass to act like a maniac. Be courteous, intelligent, and follow traffic signals and laws. This puts cars on notice that bikers (even slow, non-athletic ones) deserve their fair share of the road, but you need to reciprocate by acting in a predictable, lawful, and measured way.

Replace time at the gym (or other exercise efforts) with time on a bike as part of your daily routine. Isn’t it nonsensical to use a car to rush through your day so you can get home at 5 and then go to the gym (or bike or run) for an hour? If you slow down and use a bike for some tasks during the day, you won’t need to spend as much time doing mindless exercise. And you’ll save on gas (and carbon emissions), and get better connected to your community.

This week, I used my bike to go to three lunch meetings, a doctor appointment, and two trips to buy groceries. I put in over 60 miles just between Monday and Thursday, and it took only a few minutes more time than it would have to drive. I am sure I’ve lost weight doing this, though I don’t care how much. I feel better and that alone is worth it.

And two of the best perks about biking: you’re never stuck in traffic, and second, you always get a top-notch parking spot. Plus, you’re not circling around trying to find a place to park. More gas and time savings. Being on a bike in many ways is faster and more efficient than being in a car, especially when the distances you’re talking about are under 30 minutes of bike time (8-10 miles).

Anyone who lives in the Annapolis, Maryland area knows it’s a congested, frustrating experience to try to get ANYWHERE on a weekday afternoon by car. Why not try it on a bike and see how much quicker it can be?